Nifty IT Index Rises 2% Led by Mphasis, Coforge, TCS Despite Market Weakness

The Nifty IT index showed strong resilience on Thursday, climbing 2.1 percent during intra-day trading, even as the broader market indices slipped. This rise was led by robust gains in key IT stocks such as Mphasis, Coforge, and Tata Consultancy Services (TCS). At the time of the last check, nine out of the ten stocks in the index were trading higher, making the IT sector the top-performing segment on the NSE for the day.

Mphasis emerged as the biggest gainer, with its shares advancing 4.44 percent. It was followed by Coforge, which rose 3.85 percent, and Infosys, up 2.42 percent. Other notable contributors included TCS, HCL Technologies, and Tech Mahindra, which appreciated 1.70 percent, 1.56 percent, and 1.44 percent respectively. Persistent Systems, Wipro, and LTIMindtree also experienced upward movement. Oracle Financial Services Software was the only stock recording a decline, falling 0.97 percent.

These gains come amid growing anticipation for the upcoming second-quarter financial results for the fiscal year 2027. The IT earnings season officially begins on October 8, 2026, with TCS scheduled to announce its September quarter results on the same day. The company’s board is set to review both standalone and consolidated earnings and is also expected to consider declaring a second interim dividend.

Analysts are preparing for a somewhat subdued performance from the sector, reflecting the cautious macroeconomic environment. Consensus estimates project that large-cap IT companies may see quarter-on-quarter constant currency growth ranging from a slight decline of 0.5 percent to an increase of 3 percent. In contrast, mid-cap firms are expected to outperform, with growth potentially reaching up to 12 percent, driven by expanding large deals and some inorganic growth.

Motilal Oswal Financial Services highlighted that despite the seasonally strong quarter, demand is unlikely to pick up significantly. Factors such as macroeconomic pressures, ongoing interest rate hikes, disruptions related to artificial intelligence, and geopolitical uncertainties continue to impact discretionary spending and decision-making cycles within the industry. The brokerage anticipates that growth momentum will remain muted not just for the second quarter but possibly extending into the third quarter, partly due to employee furloughs.

Kotak Institutional Equities also noted that demand conditions have remained flat since the June 2026 quarter. The brokerage expects large companies to deliver another quiet quarter, with HCL Technologies standing out as an exception. Tech Mahindra is likely to lead growth among hybrid companies, while mid-tier firms such as Persistent Systems, Coforge, and Mphasis are expected to report strong expansion. Margins are projected to hold steady, although signs of operational stress are increasingly apparent.

Kotak further anticipates that Infosys might lower its guidance, while HCL Technologies is expected to maintain its growth outlook midpoint. The brokerage observed that the impact of AI-driven cost reductions is becoming visible in the core business areas. While challengers are gaining market share through stronger execution, incumbents are primarily focused on defending existing revenues. Preferred stocks in this environment include Tech Mahindra, Coforge, Sagility, and Indegene.

Meanwhile, the broader market indices showed weakness throughout the day. The NSE Nifty 50 index dropped 0.49 percent intraday, reaching 22,508.05, and was trading 0.23 percent lower at 22,568.15 as of mid-morning. The BSE Sensex similarly declined, hitting an intraday low of 72,187.62, down 0.40 percent, and was down 0.06 percent at 72,480.29 shortly thereafter.

The contrasting performance of the IT sector against the broader market highlights the sector’s relative strength in a challenging economic environment. Investors appear to be positioning ahead of earnings releases, focusing on companies with strong deal pipelines and potential for mid-cap growth. The coming weeks will provide clearer insights as quarterly results unveil how these firms are navigating ongoing economic headwinds and technological disruptions.